Moody's downgrades Chesapeake, rates loans Ba3

Moody's Investors Service said it assigned a Ba3 rating to Chesapeake Corp.'s new $400 million senior secured credit facilities, which are being arranged on a best-efforts basis and are comprised of a £70 million term loan, a £70 million delayed-draw term loan and a $125 million revolving credit facility that is expected to be un-drawn at closing.

Concurrently, Moody's downgraded the company's corporate family rating to B1 from Ba3, senior subordinated regular bond/debenture to B3 from B2 and senior unsecured revenue bonds to B2 from B1.

With the rating changes, the outlook was restored to stable.

The downgrade was prompted by increased debt levels that are expected to persist over the near-to-mid term and by expectations that Chesapeake will be modestly cash flow negative through 2006 and 2007, with break-even levels reached only in 2008, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.